Our office continues to operate during our regular business hours, which are 8:30 am - 5:30 pm, Monday through Friday, but you can call the office 24 hours a day. We continue to follow all recommendations and requirements of the State of Emergency Stay at Home Order. Consultations are available via telephone or by video conference. The safety of our clients and employees is of the utmost importance and, therefore, in-person meetings are not available at this time except for emergencies or absolutely essential legal services.

Chapter 12 Bankruptcy

Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”


Though most people have heard of Chapter 7 bankruptcies (known as liquidation bankruptcy) and Chapter 13s (used to restructure debts), Chapter 12 bankruptcies are far less common. To find out more about what a Chapter 12 bankruptcy is and how it is used, keep reading.


Number 12 sign Charlotte Chapter 12 Bankruptcy Lawyer North Carolina Debt AttorneyWhat is a Chapter 12 bankruptcy?


Chapter 12 is actually one of the newer categories of bankruptcy and was only formally made permanent in 2005. Chapter 12 is used specifically for family farmers and family fishermen. Chapter 12 is similar to a Chapter 13 in that it allows the restructuring of a person’s debts to avoid liquidation or foreclosure.


Who is eligible for a Chapter 12 bankruptcy?


Very few debtors are actually eligible to file Chapter 12 bankruptcy and in 2011, the most recent year that numbers have been made available, only 630 of the overall 1.4 million bankruptcies filed in the U.S. were for Chapter 12 cases.


The law says that only a family farmer or fisherman with regular income from such work is allowed to seek Chapter 12 bankruptcy protection. Debtors can be individuals, companies or partnerships and must not have debts exceeding $4 million if they are farmers or $1.8 million if they are fishermen. Debtors are required to derive at least half of their gross income from either farming or fishing, meaning that the career must be a primary focus, not a hobby. Finally, 50 percent of all the farmer’s debt (excluding home mortgages) must be related to farming operations while 80 percent of debts for fisherman must be related to fishing.


How does Chapter 12 work?


As in a Chapter 12, the debtor must work with a trustee to propose a repayment plan within 90 days of the date that the bankruptcy was filed. The plan operates in a similar way as a Chapter 13, with debtors proposing plans to pay creditors back over a period of three to five years. So long as creditors receive at least as much money back under the Chapter 12 as they would have received in a Chapter 7 bankruptcy, the court will consider the remaining obligations left at the end of the repayment plan discharged. However, some debts, including child support and certain tax debts are considered non-dischargeable, just like with other types of bankruptcy.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC  today at (704) 370-2828 or find additional resources here. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.



About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.




“Family Farmer or Family Fisherman Bankruptcy,” published at USCourts.gov.



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